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Amidst all the recent incidents that have created a negative reputation for the cryptocurrency industry, a major chunk of the top projects have been building their infrastructure steadily over the past months. Even as a bearish sentiment persists in the market, certain tokens have not failed to show strength in terms of price, team or community.
DeFi projects too, along with several others have taken big blows. Some of which have declared insolvency and recorded all-time lows. So, it came as a relief surprise for users when the INV token of the Inverse Finance Defi platform saw a sudden spike in prices. We will take a look at the needed concepts before understanding the reasons for a price pump.
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What is DeFi?
DeFi or Decentralized Finance is in simple words, an online bank. Similar to banks, Defi platforms operate by lending or borrowing money. However, unlike banks, there is no authoritative figure to act as a guardian intermediary for the transactions.
These platforms run on smart contracts, which are typically codes that are prewritten by the developers of the platform. Thus, there is no human interference which gives the user more security and autonomy over their assets.
Decisions on the platform are taken in a manner that suits every user. A DAO or Decentralized Autonomous Organization is set up where every token holder is given a right to vote for future developments of the project. The platform incentivizes users to deposit funds by providing them with appealing interest rates and featuring prizes or NFTs for simply being a part of the project.
While a majority of these projects may be started by retail investors or programmers and may not be able to sustain themselves over a long period, huge projects that have backing from top investment firms tend to maintain a sustained community and project growth.
What is INV or Inverse finance?
Founded by Nour Haridy in 2020, Inverse Finance claims to be a revolutionary DeFi platform that aims to focus completely on the concept of decentralization and to move past outdated and reckless systems. They plan on achieving this by working on their motto- to become a positive-sum DeFi platform.
Through accumulating high yields on highly sustainable APYs, maximising earnings through revenue sharing and benefitting from low-cost stablecoin borrowing, the project intends to create an easy and efficient blockchain banking experience for users.
The team behind Inverse Finance is an experienced group of developers who have worked on projects like Olympus, Scream, Concave, Station0x etc. The company has also partnered with major crypto giants like Ethereum, Sushiswap, Fantom etc.
The platform had recently gained a lot of traction due to two sizeable hacks that happened this year on it, where funds worth around $16.8 million were stolen. The first attack was carried out in April, while the second one was executed in June. Assets worth $15.6 and $1.2 million were stolen, respectively. The hacker at both times had taken a flash loan to dupe the protocol and gain control of assets.
Why the Sudden Spike in INV Token?
Since bears took over the market, like other altcoins, INV too had seen considerable lows, where the price dropped from its all-time high of around $1451 in October last year to the $80 range in June this year. The prices had recorded more negative impact as the news of the hacks was out in public.
This took a complete pivot recently, with the prices pumping higher than 50% in a single day where INV shot up from around $96 to $165 at a commendable speed. The spike has since been corrected but has still maintained to stay above the previous consolidation range.
The pump can be speculated to be due to the excellent APY provided by INV’s DOLA stablecoin. Reports by the team stated that DOLA 3POOL APY was more than 50% on Conves Finance. This factor could’ve had a major play in the current runup of INV.
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Needless the say, its strong community across several social media platforms have also been keeping up actively with every development or update put out by the team. At the time of writing, INV has corrected to the $110 range. It has a current market cap of around $10 million and an attractive circulating supply of just 93,725 tokens.
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